Ohio Governor approves racetrack slots
June 15, 2011
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An agreement reached between Ohio Gov. John Kasich and Rock Ohio Caesars (ROC), which will operate casino in Cleveland and Cincinnati, paves the way for the introduction of slot machines at the state’s seven racetracks. Gov. Kasich announced the agreement at a noon press conference on Wednesday.
According to reports, the states racetracks will have to pay a $50 million license fee, plus 33.5 percent of sales revenue. Once licensed, racetracks will have three years to open its slots facility. Racetracks would be required to invest at least $150 million—including the machines—with a maximum credit of $25 million for the value of existing facilities and land. Racetracks will still have to reach an agreement with horsemen in the state. The tracks also have until June 30, 2012, to apply, otherwise a racino license could be offered to another company "in reasonable proximity" of a racetrack.
The agreement with ROC allows the company to pay no state commercial activity tax on all wagers. Instead, the deal taxes ROC on wagers minus payouts.
The state will now require an additional $110 million in payments from ROC over the next decade and an increase in its overall investment from $500 million to $900 million. The casino will also pay a $1.5 million application fee and a fee of $10 million a year for the first five years and $12 million for each of the second five years. The state still has to formalize an agreement with Penn National Gaming, which will operate casinos in Toledo and Columbus.